SPS

Set out below is a summary of the key terms of SPS. This information should be read in conjunction with the Terms of Issue.

Issuer	St.George Bank Limited (ABN 92 055 513 070).
Security	Step-up Preference Shares (SPS). SPS are non-cumulative unsecured preference shares in the capital of St.George.
Number	One million five hundred thousand SPS to raise $150 million.
Issue Price	$100 per SPS (Face Value).
Term	SPS have no maturity date and are perpetual – unless Exchanged.
Increased Margin Date	20 August 2016.
Floating rate franked	Dividends are preferred, non-cumulative, based on a floating rate and expected to be fully franked. Dividends are scheduled to be paid quarterly in arrears subject to the Payment Tests.
Dividend Rate	The Dividend Rate for each quarterly Dividend will be calculated using the following formula: Dividend Rate = ( Bank Bill Swap Rate + Margin ) x (1 – Tax Rate ) where: Bank Bill Swap Rate • the Bank Bill Swap Rate on the first Business Day of the relevant Dividend Period; Margin • from (and including) the Allotment Date until (but not including) 20 August 2016 – the Initial Margin set through the Bookbuild is 1.10% per annum; and • from (and including) 20 August 2016 until SPS are Exchanged – the Initial Margin set through the Bookbuild plus a one time step-up of 1.00% per annum; and Tax Rate • the Australian corporate tax rate applicable to St.George's franking account as at the Allotment Date – 30% at the date of this Prospectus (expressed as a decimal in the formula, 0.30).
Dividend Payment Dates	Dividends are scheduled to be paid in arrears on 20 August, 20 November, 20 February and 20 May in each year that SPS are on issue. The first Dividend Payment Date is 20 August 2006. The last Dividend Payment Date is the date on which SPS are Exchanged. If any of these dates are not Business Days (as is the case for the first Dividend Payment Date), then payment will be made on the next Business Day.
Franking	St.George expects Dividends to be fully franked. If, on a Dividend Payment Date, the Australian corporate tax rate applicable to the franking account of St.George differs from the Tax Rate, the Dividend will be adjusted downwards or upwards accordingly. If a Dividend is unfranked or partially franked, the Dividend will be increased to compensate for the unfranked component.
Payment Tests	The payment of a Dividend is subject to the Payment Tests which are summarised as: the Directors declaring a Dividend to be payable; St.George having sufficient profits available to pay the Dividend; St.George being able to pay the Dividend without St.George or the Group breaching APRA's capital adequacy guidelines; the amount of the Dividend not exceeding St.George's APRA Distributable Profits; and in the case of an Optional Dividend, APRA's prior written approval.
Dividend stopper if Dividends are not paid	If St.George does not declare a Dividend or pay a declared Dividend in full within 20 Business Days after a Dividend Payment Date, then a dividend stopper applies. This means that St.George may not pay any dividend or distribution on any Equal Ranking Capital Securities (including SAINTS and DCS) or Junior Ranking Capital Securities (including Ordinary Shares) or make any return of capital on any Junior Ranking Capital Securities without the approval of a special resolution of Holders, unless (among other things) St.George pays 12 months Dividends in full or pays any unpaid Dividends from the last 12 months.
Exchange by St.George	St.George may choose Exchange of: some or all of your SPS on 20 August 2016, or any Dividend Payment Date after that date; and all (but not some only) of your SPS following the occurrence of a Tax Event, Regulatory Event or Acquisition Event. On Exchange, St.George may choose to: convert each SPS into a number of Ordinary Shares equal to the Conversion Number; redeem, buy back or cancel SPS for the Face Value of $100 each (subject to APRA's approval); or undertake a combination of the above.
Exchange by Holders	Holders have no right to request Exchange.
Conversion Number	The Conversion Number that determines the rate at which each SPS will convert into Ordinary Shares will be calculated by dividing: the Face Value of $100 per SPS; by the volume weighted average price (VWAP) of Ordinary Shares during the 20 Business Days immediately preceding the Exchange Date – reduced by the Conversion Discount of 2.5%. This number of Ordinary Shares that a Holder will receive on conversion for each SPS is subject to a Maximum Conversion Number.
Maximum Conversion Number	400, subject to certain adjustments. The Maximum Conversion Number ensures the maximum number of Ordinary Shares that each SPS can be Exchanged for is 400 Ordinary Shares.
Ranking on winding up	SPS are not deposits or liabilities of St.George. SPS rank for payment on a winding up of St.George ahead of Ordinary Shares and effectively equal with Equal Ranking Capital Securities (including SAINTS and DCS), but are subordinated to all depositors and creditors of St.George. St.George reserves the right in the future to issue additional SPS, or other preference shares or Capital Securities ranking ahead of, equally with or behind SPS, whether in respect of dividends, a return of capital on winding up, or otherwise.
Participation	SPS do not carry a right to participate in issues of securities or capital reconstructions of St.George.
Voting rights	SPS do not carry a right to vote at general meetings of St.George, except in limited circumstances prescribed by the ASX Listing Rules. See clause 5 of the Terms of Issue.
Quotation	SPS are quoted on ASX under the code SGBPC.